GlaxoSmithKline (GSK) cannot escape the lawsuit brought against them by more than 41 insurance companies offering their defective drugs, which were produced by a Puerto Rican manufacturer. A Pennsylvania judge has ruled that the company will face the lawsuits brought against them.
The insurers have used a decision by the Third Circuit Court of Appeals that allows union health funds to bring claims against GSK in accordance with the Racketeer Influenced and Corrupt Organizations Act (RICO).
The judge overseeing the case felt that the insurance companies were economically injured when they purchased the faulty drugs. Therefore, the judge recalled the decision over a GSK Avandia diabetes drug case. Under that decision, the insurance company’s overpayment for a drug that was deceptive and defective was concrete evidence to warrant an award from the jury. The plaintiffs have pleaded their injury case; therefore, it can move on.
The Puerto Rico unit from GSK has already pled guilty to charges brought against them by the United States Department of Justice in 2010. The company had to pay $750 million to settle a whistleblower claim after a quality assurance manager filed a suit against them in 2004 under the False Claims Act. Documents from the case show that the factory had manufactured defective medications, and then jumbled those medications for years before it was noticed.
The 41 insurance companies filed their lawsuit in 2013, stating that GSK induced them to pay billions for defective drugs that were falsely marketed from Puerto Rico. Also, GSK did not react when they were presented with the defective drug problems, and the company allegedly chose to cover the case up instead of act to protect the public.
GSK is still arguing that the facts of their Avandia case were different from the existing case. They stated that the plaintiffs in that case had argued about misrepresentations of the safety of the drug that led to higher quantities prescribed and higher prices. However, the current case is alleging that the drugs were worthless because of violations at the plant in Puerto Rico, but the affected quality of the drugs was not the issue.
The case still has to finish trial, but it will be interesting to see how the case plays out – especially when the insurance companies is filing the lawsuit rather than patients.
The biggest issue to note in this case is that the plaintiffs are not alleging the excessive price and quantity effect theories, as in past cases. Instead, they are using supporting facts which show that GSK’s non-disclosure of the worthless drugs meant that physicians were prescribing the medications, but normally would not have if the company had not concealed the information. Insurers would also not have added these drugs to their formularies had they known that they were defective.
If you took a defective drug, you may be entitled to compensation under the law. You must first file a lawsuit with a personal injury attorney. Contact Berkowitz and Hanna LLC today to schedule a no-obligation case evaluation. Call or contact us online to get started.